Even as the number of 2016 presidential candidates in both parties has dwindled, the media -- particularly television news -- has yet to focus on an in-depth discussion of the candidates’ policy proposals. While it was difficult to discern the energy policies that a President Trump would implement, candidate Hillary Clinton has made quite clear the energy goals that a President H.R. Clinton would set. Including her “Clean Energy Challenge,” issued last summer, and the proposal to increase energy efficiency standards that she announced in February 2016, Clinton has made very specific and far-reaching plans that would continue and expand on the Obama Administration’s policies. The focus of her energy policy is twofold – address climate change and use the clean energy industry to grow the economy and create jobs. It seems safe to say the phrase “all of the above” will not apply to the Clinton administration energy policy.

The President gave an indication of his environmental focus in his inaugural address, and then again in his state of the union speech. The focus would be on climate change.
Central to that focus would be the EPA Adminstrator, but that would not be Lisa Jackson who tendered her resignation at the end of 2012. If Washington gossip is any guide, Ms. Jackson's replacement will be Gina McCarthy, the current head of EPA's Office of Air and Radiation.
We went looking to see if we could draw a bead on where Ms. McCarthy might lead EPA. We found a recent speech and it was directly on point. On February 21, Ms. McCarthy addressed an audience at the Georgetown Law Center at a conference on Climate Change and Energy Policy. (The conference was videotaped. Ms. McCarthy has the podium from about 4:50 to 5:30 if you are interested.)
Ms. McCarthy has a reputation of being something of a pragmatist. Her talk was consistent with that. A brief summary might be: Climate change is here and we have to deal with it, but in addressing carbon dioxide there can be great benefits from doing so in the form of reducing pollution, increasing efficiency and empowering communities.
Pollution reductions will come in at least three forms. First, if more renewable energy sources are developed, there will be less emissions. Second, if production and use is made more efficient there will be less emissions. Third, if production is focused on fossil fuels that emit less pollutants when burned (that is, not coal), there will be less emissions. We note that this strategy is already at work. The growth of wind and solar power has been meteoric. Ms. McCarthy promoted electric cars, which are far more efficient than gasoline-powered ones (although she ignored compressed natural gas vehicles, which are low emission and have some compelling advantages over electric cars). And we have covered before the catastrophe for coal signaled by the proposed Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units, which forecasts not a single new coal plant through 2030.
Significantly, or perhaps not, she did not mention fracking and the phenomenal recent growth in natural gas production. That was surprising. A recent Harvard Magazine article summarized the pollution and greenhouse gas effects of the natural gas bonanza:
The shift from coal to gas in the electricity sector has also yielded an environmental bonus—a significant reduction in emissions of CO2, because CO2 emissions per unit of electricity generated using coal are more than double those produced using gas. … [T]he U.S. Energy Information Administration (EIA) reported that domestic emissions of CO2 during the first quarter of 2012 fell to the lowest level recorded since 1992. An ancillary benefit of the coal-to-gas switch has been a significant reduction in emissions of sulfur dioxide, the cause of acid rain, because many of the older coal-burning plants selectively idled by the price-induced fuel switch were not equipped to remove this pollutant from their stack gases.
Efficiency pervaded her remarks. A striking number is the $1.7 trillion she stated automobile fuel efficiency standards had saved consumers at the pump. But that is just the tip of the iceberg. EPA will help Americans make buildings, processes and communities more efficient. According to Ms. McCarthy the EPA Climate Showcase Communities saved $19 million per year based in large part on efficiency.
We are somewhat troubled by the “eye of the beholder” syndrome exhibited here. Certainly consumers saved money at the pump. But they spent more at the car dealer. How did they fare overall? The answer depends on how long they owned their car and the price of gas. According to research in 2012 by TrueCar.com for the New York Times, at $4/gallon “[e]xcept for two hybrids, the Prius and Lincoln MKZ, and the diesel-powered Volkswagen Jetta TDI, the added cost of the fuel-efficient technologies is so high that it would take the average driver many years — in some cases more than a decade — to save money over comparable new models with conventional internal-combustion engines.”
Ms. McCarthy’s vision of empowerment is through information. If building owners get the knowledge of how to make their buildings more efficient, they will because it makes sense to do so. If communities are provided the relevant information, they will make enabling smart choices. Indeed, she closed on the importance of information, referencing three sources. First, EPA has now been collecting information on greenhouse gas emissions for two years. That information is publicly available. People should look at this because it identifies the sources of the climate change problem. Electric utilities are far and away the biggest emitters of greenhouse gases (which is to say, all of us are because, with rare exceptions, all of us use electricity generated with fossil fuels).
Second, she touted the EPA’s 2012 report, Climate Change Indicators in the United States (18MB). This is a valuable resource. Twenty-six “indicators” are assessed as to what they show about a world beset by climate change. All are familiar with reduced ice sheets, reduced snowpack and higher average temperatures. Less familiar is the documented increase in ragweed pollen season and retained ocean heat. And the report is honest about what is not known. Although 7000 Americans were reported to have died of heat-related illnesses in the last 30 years, trends have not been determined. Although one might think that a hotter world would lead to more hurricanes, the data have not proven that yet.
Last, Ms. McCarthy praised government research into adaptation and the various reports issued and to be issued.
Some view agency heads in Washington as essentially valueless; talking heads, here today and gone tomorrow. The bureaucracy was there when the new head arrived and will be there when the now old head leaves. What this view misses is that the agency head can muster the agency’s resources in support of one initiative, argue for it on Capitol Hill, at the White House and in the press, and give the extra boost when the going gets rough. Gina McCarthy was instrumental in building the northeast’s cap-and-trade program (the Regional Greenhouse Gas Initiative) in her native Connecticut. Certainly, that idea on a national basis is percolating again.

Rio+20 wrapped up yesterday. The moniker derives from the twentieth anniversary of the Earth Summit, the 1992 United Nations Conference on Sustainable Development, which was held in Rio de Janeiro. This reprise was billed as “an historic opportunity to define pathways to a safer, more equitable, cleaner, greener and more prosperous world for all.” The conferees focused on two themes: “How to build a green economy to achieve sustainable development and lift people out of poverty, ... and how to improve international coordination for sustainable development." The agenda was dense, ranging from jobs to energy, sustainable cities to food security and sustainable agriculture, and water and oceans to disaster readiness. Some criticized this “all things to all people” approach. We take a more pragmatic view: “whatever works.”
Unfortunately, it does not appear that much is working. All that was agreed was that there would be more discussion in the future. Criticism of the conference was uniform. NPR panned it as “one of the biggest duds.” The New York Times captured the disappointment of CARE (a political charade), Greenpeace (a failure of epic proportions) and the Pew Environment Group (a far cry from success). Even Sha Zukang, Secretary-General of the conference, could muster little positive to say: "This is an outcome that makes nobody happy. My job was to make everyone equally unhappy,"
If the goal was another international agreement filled with platitudes that would accomplish nothing, that was not achieved. But we would like to suggest that something positive may be coming. We would like to focus on just one of the initiatives, Sustainable Energy for All (SE4ALL). Conducted under the auspices of the United Nations, SE4ALL has three objectives:
1. Universal access to electricity2. Increased use of renewable energy3. Increased energy efficiency
Over 1.3 billion people in the world do not have access to electricity for their homes and work. Electricity is enabling. Whether for studying after dark, pumping irrigation water, eliminating wood/charcoal/dung stoves, or refrigerating medicine, the benefits of electricity are immediate and life-changing. The program calls for innovation and investment, and policy choices that enhance innovation and investment.
Renewable energy is part of the program for many of the reasons raised in this country: job creation, reduction of greenhouse gas and pollutant emissions, insulation from price volatility, and increased energy security. A justification not common to the domestic debate about renewable energy is also put forth. Renewable energy can cut balance-of-payment imbalances, The program’s goal is to double the share of renewable energy in the world energy use portfolio by 2030.
“Of the three objectives of Sustainable Energy for All, improving energy efficiency has the clearest impact on saving money, improving business results, and delivering more services for consumers.” Thus efficiency improvements are the easiest point of entry for lifting more people out of energy deprivation for less money. The program’s goal is to double the current rate of efficiency improvement by 2030.
Is this all pie in the sky?
Two vantage points suggest it is not. First, the investment community very much supports the renewable energy sector. Michael Liebriech, the CEO of Bloomberg New Energy Finance gave an interview at Rio+20 and made the point that he’s seen $1 trillion pour into the sector globally since 2004. “My clients really don’t necessarily care about what’s happening in the negotiations. They’re concerned about what’s right in front of them. What would you rather trust, a decades-long process that hasn’t resulted in a whole lot of progress, or a trillion dollars in investment?” Diplomats and governments should listen.
Second, UN Secretary-General Ban Ki-Moon, who grew up without electricity, has explained why SE4ALL is a program worth putting forward: "Widespread energy poverty condemns billions of people to darkness, to ill health and to missed opportunities ....”
One can imagine him continuing: “I had seen first-hand the grim drudgery and grind, which had been the common lot of … generations of … farm women. I had seen the tallow candle in my own home, followed by the coal-oil lamp. I knew what it was to take care of the farm chores by the flickering, undependable light of the lantern in the mud and cold rains of the fall and the snow and icy winds of winter. … I could close my eyes and recall the innumerable scenes of the harvest and the unending punishing tasks performed by hundreds of thousands of women, growing old prematurely, dying before their time, conscious of the great gap between their lives and the lives of those whom the accident of birth or choice placed in the towns and cities.”
Except that is not the Secretary General, it is Senator Frank Norris, the champion of the Rural Electrification Act of 1936, which literally turned the lights on across much of rural America. Rural electrification was a good idea then, as millions can attest. And it is a good idea now. The trick today is how to wed the developing renewable energy sector, with the billions of dollars of investment being made, to an electrification program for 1.3 billion people. A distinction here that will make electrification easier than it was in the 1930s, is that many renewable energy sources (solar, wind, tidal) by their nature can be utilized without investment in large power distribution networks. If SE4ALL is about innovation and investment, it seems eminently achievable.

One of the more infuriating things about lawyers is that often, if they do their job right, their client wins and no one else benefits from it. This is what happened Monday before Judge Sand in the Southern District of New York in the closely followed green building case, Gifford v U.S.Green Building Council. The judge, in a short Memorandum & Order barely over seven pages (attached below) dismissed Mr. Gifford's case on procedural grounds. So we are left to wonder about the merits.
Mr. Gifford and his co-plaintiffs are building engineering professionals. They assert that the USGBC's LEED standard is false and misleading and has injured them in their business. Specifically, "LEED-certified buildings are no more energy-efficient than non-LEED certified buildings. USGBC's own study data on the subject indicate that, on average, LEED buildings use 41% more energy than non-LEED buildings. There is no objective empirical support for the claim that LEED buildings consume less energy. LEED buildings are less efficient because the criteria that USGBC purportedly uses to certify buildings do not correlate with energy efficiency." First Amended Complaint ¶ 4 (attached below); also id. ¶ 32 (providing more detail). As a result of the LEED claims made by USGBC, customers purchase LEED services rather than plaintiffs' design services.
These injuries, according to plaintiffs, entitled plaintiffs to proceed in court for injunctive relief and damages under the federal Lanham Act for commercial misrepresentations and parallel state law claims.
USGBC defended on the ground that the plaintiffs had no standing to assert Lanham Act injury. The court agreed. Memorandum & Order at 7.
There are two tests for standing in the Second Circuit. Under the first test, the parties must be competitors. Id. at 4. Plaintiffs did not certify green buildings or accredit professionals, as USGBC did. Accordingly, they failed the first test. The second test, the reasonable commercial interest test, was more forgiving. There "a plaintiff must demonstrate (1) a reasonable interest to be protected against the alleged false advertising, and (2) a reasonable basis for believing that the interest is likely to be damaged by the alleged false advertising." Id. (citation omitted). Where the parties are not direct competitors a plaintiff must make a "more substantial showing of injury and causation.". Id. at 5 (citation omitted).
Mr. Gifford and his co-plaintiffs could not satisfy that test either. The court found the allegation that plaintiffs' professional services would be "subsumed" by USGBC was "speculative". It commented that "there is no requirement that a builder hire LEED-accredited professionals at any level, let alone every level, to attain LEED certification, ..." Id. at 6. (While technically correct, my LEED AP colleagues confirmed that as a practical matter they can't imagine a LEED project would proceed without a LEED AP on the project team. At the very least, having a LEED AP on the team entitles one to points toward certification.)
As to the specific allegation of misrepresentation regarding building efficiencies, there was no allegation that anyone relied on that statement to decline to hire Mr Gifford. So the plaintiffs lacked standing under the second test too. Id. at 7.
The absence of standing was fatal to the federal claims, which the court dismissed with prejudice. Id. As to the state law claims, it declined to assert supplemental jurisdiction and dismissed those claims as well (but without prejudice). Id. at 8.
The blogosphere reports that Mr Gifford is considering his appeal. A press release by USGBC states: "This successful outcome is a testament to our process and to our commitment to do what is right."
What the rest of us want to know, however, is whether there was any substance to any of Mr. Gifford's allegations. This is important and not only for the decision of whether it is sensible to build a LEED-certified building. One has to think about plans that go awry. Should a green building project fail and investors and lenders lose money (and it is a statistical certainty that this will happen), the injured parties will cast about looking for a place to lay the blame. Mr Gifford might assert that false hopes raised by USGBC's claims are at the root of the problem.
20110815 Memorandum & Order (of Dismissal) Gifford v. U.S. Green Building Council (72.00 bytes)
Gifford v U.S. Green Building Council - First Amended Complaint February 7, 2011.PDF (94.75 kb)

McCARTER & ENGLISH CLIMATE CHANGE AND RENEWABLE ENERGY PRACTICE GROUP

The business case for the development of renewable energy projects, from biodiesel and ethanol to wind, solar, and distributed generation, is more compelling than ever as tax and regulatory incentives combine to attract investments. Emerging issues in environmental law and increasingly recognized principles of corporate social responsibility are encouraging public companies to voluntarily reduce greenhouse gas emissions, install clean energy alternatives, and invest overseas in projects under the Kyoto Protocol to respond to climate change concerns.